The College Confidence Crisis: Americans’ Sentiments at All-Time Low

On the heels of Congress doubling some student loan interest rates, Americans appear to be putting less value on a college degree.

According to the latest COUNTRY Financial Security Index® survey, just half of Americans say a college education is still a good financial investment. This is down seven points from last year and a 31-point drop from 2008, when the recession was in full swing.

2008

2009

2010

2011

2012

2013

College is still a good financial investment

81%

79%

64%

58%

57%

50%

The impact of student loan debt on financial freedom could be one reason confidence in a college degree is eroding. One in five surveyed have student loan debt and 55 percent say their education loans are affecting decisions such as getting married, buying a home and/or saving for retirement. Postponing major life decisions could be due to the fact that nearly four in ten Americans (39 percent) say it will take them 10 years or more to pay off their loan debt.

“It’s disappointing to see Americans devaluing a college degree. It’s clear that the Great Recession is still rippling through the U.S. economy, now shaking our confidence in higher education. But as much as rising tuition costs and student loans tarnish the perception of this investment, having a college degree remains an important differentiator in the job market,” says Joe Buhrmann, manager of financial security support at COUNTRY Financial. “To balance college education costs with other life decisions, create a financial plan to help you track your finances. Then map out that plan with your loan counselor so you can make regular, manageable payments.”

See an infographic on how Americans feel about the value of a college degree and rising student loan debt.

Varying Approaches to Debt Repayment

When it comes to actually paying off debt, habits vary among Americans:

Forty-six percent say they make regular payments, but only pay the minimum.

Another 37 percent make regular payments and pay more than the minimum.

Ten percent say they make payments, but not regularly.

And 5 percent are in default.

Buhrmann offers the following tips for those paying off student loan debt:

Be on time
It’s just as important to be “on time” with your loan repayments as it is to be on time for your first job. Remember, you’re building a valuable credit history that will not only help reduce future debt, but also help save money on insurance bills and secure a good job.

Minimize your interest costs
Accelerating monthly payments can shorten the overall loan period. Graduated payment plans allow for lower monthly payments early on and higher payments down the road. Either way, know your budget and resist the urge to splurge.

Don’t overlook important tax breaksRemember, you may be able to deduct, subject to limits, up to $2,500 per year in student loan interest. That can help at tax time and may provide extra cash to pay down the principal.

Larger Impact of Student Loan Debt

Looking at the larger impact of increasing student loan debt, 59 percent of Americans blame the crushing weight of it, in part, for the U.S. economy’s anemic recovery. Adding to this concern is the fact that nearly three in four (74 percent) expect the amount of student loan debt to be higher ten years from now.The COUNTRY Financial Security Index®
Since 2007, the COUNTRY Financial Security Index has measured Americans’ sentiments of their personal financial security. The COUNTRY Index also delves deeper into individual personal finance topics to better inform Americans about the issues impacting their finances. Survey data, videos and analysis are available at www.countryfinancialsecurityblog.com and on Twitter at @FinanceSecure.

The COUNTRY Index was created by COUNTRY Financial and is compiled by Rasmussen Reports, LLC, an independent research firm, based on a national telephone and online survey of at least 3,000 Americans.

The margin of sampling error for a survey based on this many interviews is approximately +/- 2 percentage points with a 95 percent level of confidence.

About COUNTRY

COUNTRY Financial (http://www.countryfinancial.com) serves about one million households and businesses throughout the United States. It offers a full range of financial products and services from auto, home and life insurance to retirement planning services, investment management and annuities.